towards successful aal projects - ffg
TRANSCRIPT
Towards successful AAL projects
German Speaking launch event 4.3.2015
Arto Wallin, VTT
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Objectives for the day
Understand WHY you need to focus beyond excellent project proposal?
HOW end-user organizations can help your project to excel
HOW you should do iterative business development in parallel to product
development – already from the project proposal phase
Some practical tips WHAT you should include in project proposal to craft
winning project
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WHY YOU NEED TO FOCUS BEYOND EXCELLENT PROJECT PROPOSAL?
WHAT IS A
SUCCESSFUL AAL PROJECT?
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Funding approved
Project in schedule
Project in scope
Project in budget
All resources used
All deliverables delivered
Successful pilot
Succeeded through final review
Good customer feedback
Potential customers
IPR
New partners you can trust
Successful project?
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DISCUSS (3min):
How do you recognize successful project?
Have you participated to the successful
project?
What is successful project?
Without
commercialization via viable business model(s)
your project results
will end up here!
WHAT IS RECIPE FOR
COMMERCIALLY
SUCCESSFUL AAL PROJECT?
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If you are working on something exciting that you really care about, you don’t have to be pushed.
The vision pulls you! -Steve Jobs
#1 BUILD PROJECT ON INSPIRING VISION
Image:: CC Zach Dischner
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#2 MOBILIZE THE BEST TEAM TO IMPLEMENT YOUR VISION
RIGHT TEAM Complementary roles – what valuable does each partner bring into the project
Clear roles - each partner and team member is clear on what is expected from them and when
TALENT
make sure that skill-sets align with required roles.
If you assign the wrong person to a task, you are
reducing your chances of success before the
project even begins
PASSION
=a strong feeling of enthusiasm or excitement for something or about doing something
– Merriam-webster.com
Passion is contagious, so is negative attitude
Passion attracts talents
CULTURE & MINDSET
Trust is key ingredient of the working team
Accept that failure is only a way of learning OR your will become failure
Continuous learning
Entrepreneurial mindset
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“Most products fail. Not because we fail to build what we set out to build,
but because we waste time, money, and effort building the wrong product.”
– Ash Maurya author of Running Lean
#3 BUILD SOMETHING THAT IS REALLY VALUED BY THE CUSTOMERS
• Nice-to-have vs. must-have • When building a new market
Value creates market demand Build something that is valuable for: • Users they continue to use it • Paying customers they pay for it • management management invests in it (Buy-in) • Secondary/tertiary users? • Public sector?
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You need to measure that:
1. You are building something
valuable
2. You are moving to right direction
(successful market entry)! Establish measurable and reportable
criteria for success
Traditional project management metrics
don’t work!
Validated learning
What you measure is what you get!
#4 MEASURE THE VALUE AND YOUR PROGRESS
16 http://www.startuplessonslearned.com/2009/04/validated-learning-about-customers.html
http://www.slideshare.net/LeanStartupConf/ash-maurya-slides-2013
https://www.business-case-analysis.com/financial-metrics.html
#4 MEASUREMENT OF THE PROGRESS Innovation accounting
• Measures progress in relation to financial
performance and resource usage etc. • Measures progress in terms of learning
• Based on learning milestones
• Accounting method for searching for a
viable business model
• Actionable metrics: • Attention
• Acquisition,
• Activation,
• Retention,
• Revenue & Referral
• Based on business plans and product
milestones
“if we’re building something that nobody wants, it doesn’t much matter if we’re
doing it on time and on budget”
• Accounting method for executing the
business model / project / etc.
• (Vanity) metrics:
• Cash flow metrics (e.g. ROI, break-even,
IRR,…)
• Financial statement metrics
• Project metrics (e.g. completion rate,
resource spending)
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The power of the plan is NOT that it will get you there. The power of the plan is that it will get you STARTED!
#5 FLEXIBLE PLAN HOW TO REACH VISION
Image:: CC Ryan McGuire
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1) WHY - Inspiring vision
2) WHO - Team: Passion & Talent
3) WHAT -Value creates market demand
4) HOW - Measure the value and your progress
5) HOW - Flexible plan to pursue vision
If you have these ingredients, the
funding will not be an issue for you
SUMMARY
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DISCUSS:
What inspiring vision you have? Timeframe: 3-5 years after the project has ended
How can you design a successful project?
What is the recipe for successful project?
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PLANNING CONTINUOUS BUSINESS DEVELOPMENT IN AAL PROJECTS
STARTING FROM THE PROPOSAL PREPARATION PHASE
”Business plan”
Development
Guide for applicants - Chapter 13
In the AAL Programme, the business plan is assessed by evaluating and reviewing
(already in project proposal phase):
Product/Solution
the specific problem the product/solution will solve;
the product/solution and its feasibility;
the unique selling proposition
Target Group & Market/ Business model
the definition of the target group and its value network;
the market potential for this product/solution;
the active competition;
the business model – how to assure the sustainability of the product/solution in the market;
the strategy for market entry.
Resources
the resources (including material, human and financial resources) required to put this strategy
into practice as:
parallel non funded activity or
after the project funded part is completed.
the potential team which brings the product/solution to the market.
Proposing suitable business plans for the developed solutions must be an essential part of the projects
Chapter 13. ”Business plan development”
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Business model vs. Business plan
Business model
• Document written for the investors or funders
• Predictions for the future
Business plan
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Business model vs. Business plan
Business model
• Document written for the investors or funders
• Predictions for the future
Business plan
“…in the AAL Programme, activities of non-
profit and public sector organizations also
must include business plan development
aspects.” –Guide for application 2016
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Business plan development should be approached in a systematic manner, utilizing a
suitable conceptualization framework and involving different actors of the value network
(end-users, payers, delivery partners, service providers, integrators).
it is advised to use tools which have proven to be effective and adaptable to different
needs, for example the Business Model Canvas or the Lean Startup approach
From business plans to business model development
Starting
Business
plan (proposal
phase)
AAL Project (12-36 months)
Update
Business
plan (mid-term)
Update
Business
plan (final review)
Update
Business
plan
Update
Business
plan
Update
Business
plan
Update
Business
plan
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Business model vs. Business plan
Business model
• Document written for the investors or
funders
• Predictions for the future
Business plan
• Development tool
• Communication tool within team
• Helps to create common language for
business development
• A single visual diagram of your business
• Summarizing current hypothesis
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Business model canvas is a framework that helps people to describe, analyse,
design and develop business models more systematically
Source: Osterwalder et al. 2009
From business plans to business model development
Business model canvas explained: (Link: 2 minute Youtube video)
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WHO HAS A
BUSINESS
MODEL
PROJECTS DON’T HAVE BUSINESS MODELS
LESSON
Projects’ don’t have business model …
..but a project can be a great ’platform’ to
1) explore new business opportunities,
2) discover new business models and 3) validate if model works
Who has a business model?
Each company has one or several business models
Project is only a temporary form for development to succeed in the real
world BUSINESS MODEL NEEDS AN OWNER
It is crucial to find stakeholder who is willing and committed to
commercialize AAL solution via developing their business model
Project’s don’t have business models, but they can help you to find one
Who has a business model?
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Company x
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HOW TO
DESIGN
BUSINESS
MODELS
Prototyping is a good way to start ideation of new business model
How to design business models?
1. Prototyping
• Creation of new ideas
• Discussion on alternative business
models prototypes
Goal
Outcome
How
Concretized vision of the business on
the paper
• Use canvas as a mental framework
• Draw on whatever you find (napkin,
canvas,..)
Source: Osterwalder et al. 2009
Source: Osterwalder et al. 2014 Value proposition design
Scale model Real life model
“Simplification” Too complex…
Too costly to build…
Method to test
management
hypothesis on the field
Narrative
Realized strategic
choices
Processes and
practices
Business model design is a simplification of real life model, a good canvas does not mean your model will ”fly”
How to design business models?
In the AAL Programme, the business plan is assessed by evaluating and reviewing
(already in project proposal phase)
Suggested contents of business plan
Product/Solution
the specific problem the product/solution will solve;
the product/solution and its feasibility;
the unique selling proposition
Target Group & Market/ Business model
the definition of the target group and its value network;
the market potential for this product/solution;
the active competition;
the business model – how to assure the sustainability of the product/solution in the market;
the strategy for market entry.
Resources
the resources (including material, human and financial resources) required to put this strategy
into practice as:
parallel non funded activity or
after the project funded part is completed.
the potential team which brings the product/solution to the market.
Proposing suitable business plans for the developed solutions must be an essential part of the projects
Chapter 13. ”Business plan development”
Components in Business model
canvas and/or value proposition
canvas
Draft a starting Business
Model on BM Canvas
Instructions:
Define the ‘owner’ of the BM
canvas and write it to the
canvas
Fill in the quickly first version
of the business model canvas
(approx. 5 min)
(Present your findings)
BUSINESS MODEL DESIGN
Task 1.
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VALUE
NETWORK PERSPECTIVE ON
BUSINESS MODELS
In the AAL Programme, the business plan is assessed by evaluating and reviewing
(already in project proposal phase)
Suggested contents of business plan
Product/Solution
the specific problem the product/solution will solve;
the product/solution and its feasibility;
the unique selling proposition
Target Group & Market/ Business model
the definition of the target group and its value network
the market potential for this product/solution;
the active competition;
the business model – how to assure the sustainability of the product/solution in the market;
the strategy for market entry.
Resources
the resources (including material, human and financial resources) required to put this strategy
into practice as:
parallel non funded activity or
after the project funded part is completed.
the potential team which brings the product/solution to the market.
Proposing suitable business plans for the developed solutions must be an essential part of the projects
Chapter 13. ”Business plan development”
43
Businesses are not built, and do not operate in vacuum. Business
models are linked to other BMs
Image: http://blog.strategyzer.com/posts/2015/3/30/mapping-your-business-model-network
Value network perspective on business models
Customers BMs
Channel
partner BM
Key partners BMs
Financier’s
BM
Competitors’
BMs
Draft a value network of
business models
Instructions:
Define the ‘names’ of the key
players in the value network
Take one canvas for each of
those
Fill in the quickly first versions
of the business model for key
players in value network
(approx. 10 min)
BUSINESS MODEL DESIGN
Task 2.
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IMPACT OF
BUSINESS
ENVIRONMENT ON BUSINESS MODELS
In the AAL Programme, the business plan is assessed by evaluating and reviewing
(already in project proposal phase)
Suggested contents of business plan
Product/Solution
the specific problem the product/solution will solve;
the product/solution and its feasibility;
the unique selling proposition
Target Group & Market/ Business model
the definition of the target group and its value network
the market potential for this product/solution;
the active competition;
the business model – how to assure the sustainability of the product/solution in the market;
the strategy for market entry.
Resources
the resources (including material, human and financial resources) required to put this strategy
into practice as:
parallel non funded activity or
after the project funded part is completed.
the potential team which brings the product/solution to the market.
Proposing suitable business plans for the developed solutions must be an essential part of the projects
Chapter 13. ”Business plan development”
Pay attention to understanding the overall context of the business (PEST model)
Business models in the context
KP
CS RM
VP CSKR
KA
CRM
CHINDUSTRY
FORCES
MARKET
FORCES
KEY
TRENDS
MACRO-
ECONOMIC
FORCES
MARKET SEGMENTS
NEEDS AND DEMANDS
MARKET ISSUES
SWITCHING COSTS
REVENUE ATTRACTIVENESS
MA
RK
ET A
NA
LYSIS
SUPPLIERS AND OTHER VALUE CHAIN
ACTORS
STAKEHOLDERS
COMPETITORS
NEW ENTRANTS
SUBSTITUTE PRODUCTS AND
SERVICES
CO
MPETIT
IVE A
NA
LYSIS
TECHNOLOGY TRENDS
REGULATORY TRENDS SOCIETAL TRENDS
SOCIOECONOMIC TRENDS
GLOBAL MARKET CONDITIONS
CAPITAL MARKETS COMMODITIES AND OTHER RESOURCES
ECONOMIC INFRASTRUCTURE
FORESIGHT
MAKROECONOMICS
Lähde: Muokattu, Osterwalder et al. 2009Source: modified from Osterwalder et al. 2009
10/03/2016 48
PLANNING
ITERATIVE
DEVELOPMENT OF
BUSINESS MODELS
http://www.forbes.com/sites/jasonnazar/2013/10/08/14-famous-business-pivots/
We must learn the truth about which elements of our plan [strategy & business model] are working to
realize our vision and which are just crazy - Eric Ries, ‘founder’ of Lean Startup movement
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Plan the project so that there is room for several iterations!
Project is long, business environment changes fast you may need to change
your model/plans due to changes around you
Don’t stick too tightly on initial concept, but have a courage to change it
Source: Picture from Osterwalder et al. 2009
Business environment is dynamic: Your business model and project should be also
” In case the consortium considers it necessary, the business model can be changed during
the project’s implementation. “ AAL Guide for applicants 2016
Same vision can be implemented in numerous different ways
Vision is the foundation for business model
VISION
PLAN ITERATIVE BUSINESS MODEL DEVELOPMENT FROM THE
BEGINNING OF THE PROJECT
LESSON
1. BM
DESIGN
2. BM
TESTING
3.
LEARN
4.
VERIFY ! pivot or persevere
It is continuous process along the product development
Business model development process
VISION
IDEAS CONCEPT/MVP
DATA INSIGHTS
ITERATE IN FAST CYCLES
LESSON
THE SEARCH CONTINUES UNTIL YOU HAVE VALIDATED ALL MAJOR
HYPOTHESIS (SINCE IT IS NOT POSSIBLE TO PREDICT THIS, YOU NEED
TO PLAN IT THROUGHOUT THE PROJECT)
LESSON
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2. TESTING THE
BUSINESS MODEL
There are no facts, but only guesses, inside of your building
- Steve Blank
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Only way to validate business model is to test it in
reali life
Source: http://blog.strategyzer.com/posts/2015/3/2/search-design-test-learn-iterate
Testing the business model
Source: Picture from Osterwalder et al. 2009
Testing the business model Start testing from one of the business model prototypes that seems most promising
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You can test core elements of the business model without building full scale solution
Source: https://vertalab.com/blog/minimum-viable-products-of-famous-companies
Testing the business model
TO TEST BUSINESS MODEL HYPOTHESIS GET OUT OF THE BUILDING
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SUMMARY
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1. Business model development requires a common language and processes
2. Business model development is a continuous process requiring time,
resources, management and commitment (no ”silver bullets”)
3. Start early to avoid costly mistakes and use complementary resources to get the full
picture
4. Development tools make the process more systematic: The BM canvas is a good
foundation but it requires other tools to support it
5. From company guesses to knowledge: The customers (not just end-users) need to be
actively involved. Other BM components are designed around customers.
6. Partners are needed in today’s market space: Complementary resources that
reinforce each others business models (everyone has their own business model!)
7. Technology alone is not enough: Shift focus from technology offerings to value
proposition, and from selling to serving customers
8. Business model is not revenue model: Business models create, deliver and capture
value – not just capture.
There are no short cuts, it’s hard systematic work!
Recap - How to develop business models
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QUESTIONS ?
Changing the date: View – Slide Master – change the date on the slide master uppermost
Image: CC Ryan McGuire
AAL2Business Project Leader
Arto Wallin [email protected]
TECHNOLOGY FOR BUSINESS